Question

Barcenilla has a beginning accounts receivable balance of $ 140,000. Barcenilla expects sales to be $ 460,000; $ 500,000; and $ 520,000, respectively, for each month in the next quarter. Based on past experience, Barcenilla estimates that 65 percent of sales will be collected in the month of sale with the remaining amount collected in the month following the sale. Barcenilla estimates that marketing costs will average 8 percent of sales while distribution costs will be 2 percent of sales plus $ 8,000 per month. What are Barcenilla’s estimated cash receipts by month for the next quarter?